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Monday, April 30, 2012

IF THE purpose of the Certificate of Entitlement (COE) system was to slow the growth of Singapore's vehicle population, it hasn't been working all that well. At least, not when it comes to cars - the main target of the quota system.

IT IS mandatory for all cigarettes sold here to have grisly warning images as well as textual health warnings on the box.

By Andy Ho, Senior Writer

In place since July 2004, the current policy requires health warnings to cover 50 per cent of the front and 50 per cent of the back of all boxes.

As many points of sale display whole cartons as well, from next March these health warnings will have to appear on carton packaging as well.

Such a regulatory approach to correcting risky lifestyles may have been criticised by the liberal West as nannying. But it is now being adopted widely in many Western democracies, dressed up in new clothes called 'nudging' instead.

The term comes from the 2008 bestseller Nudge: Improving Decisions About Health, Wealth, and Happiness, a popular book by University of Chicago economist Richard Thaler and Harvard law professor Cass Sunstein.

The authors recount what cognitive neuroscience, social psychology and behavioural economics can teach regulators in trying to get people to behave better. The approach, typified by tobacco control policies, is 'permit but discourage'.

Though targeted at lay people, the book's agenda was huge - to move liberal democracies down the paternalistic path. The authors call theirs a 'libertarian paternalism' - libertarian in that people remain free to do what they like, but paternalistic in trying 'to influence people's behaviour... to make their lives longer, healthier and better'.

The idea is to structure the environment in such a way that people are subtly influenced or 'nudged' towards making certain decisions that policymakers have decided are 'better' for them and for society. This may be done by making the preferred choice cognitively easier to perceive. All this can be achieved without imposing a particular outcome on anyone, so nobody's individual liberty is infringed upon.

With the election of President Barack Obama, 'nudging' moved from book page to policy dossier. In January 2009, President Obama appointed Professor Sunstein as the Administrator of the White House Office of Information and Regulatory Affairs. The Office of Management and Budget was then ordered to 'clarify the role of the behavioural sciences in formulating regulatory policy'.

The US will now adopt warning images on cigarette packaging from this September. These are much tamer than those seen here, but are in stark contrast to the current US practice of including only bland textual health warnings on the box.

In May 2010, when Britain's Conservative-led coalition government walked into 10 Downing Street, it consulted with Professor Thaler, after which a seven-person 'Behavioural Insight Team' was put together in the Prime Minister's Cabinet Office to look at behavioural research and help to craft policies that nudge individuals into making better lifestyle choices.

Britain has had text-only warnings on 30 per cent of the front and 40 per cent of the back of cigarette packs since 2002. Last week, it began consultation over plain unbranded packaging for cigarettes, with just a health warning on them.

Also last week, a global test case began in Australia's highest court, where the world's Big Four tobacco firms went to block a new law as unconstitutional.

From December, that law requires all cigarette packs to come in olive green only, with stark photos and text health warnings. No brand logos are allowed. Only company names in a small, standardised font will be permitted. A decision before December is likely.

Last week, New Zealand announced that it was also introducing similar unbranded cigarette packaging, modelled on the Australian statute.

In the old days, the discipline of regulation assumed that people were rational, so policies were designed around the idea that people would rationally avoid risky behaviour that came with punishment, such as more expensive smokes.

In this 'New Governance' - new for the West but really old hat in pragmatic Singapore - people are not assumed to behave rationally. Instead, they are thought to be conditioned by cues in their environment, especially when their self-autonomy is impaired by addictive substances.

Those addicted to tobacco or heroin, say, are neither fully lacking in autonomy nor completely unimpaired in their autonomy. Instead, their autonomy is impaired without being completely nullified.

By engaging their emotions, using gruesome cues to dramatise risk, for instance, such autonomy-impaired individuals can be nudged into seeing more clearly whether continuing to smoke is worthwhile.

The aim is not to make smokers weigh their options rationally. Thus, the idea is not to dissuade certain behaviours using media campaigns to disseminate information - 'Smoking Kills', for instance.

Instead, the context in which all smoking choices are made is altered with gory imagery of its harrowing consequences.

This paternalism clearly manipulates the emotions, even if it were deployed in the public's long-term interests. Yet, it seems increasingly accepted in Western democracies, at least for lifestyle risks, especially with an autonomy-impairing product like tobacco.

The nanny state might be tempted to say 'I told you so', but could more charitably just note that the Emperor has borrowed clothes, which do seem to fit.

IF YOU asked me about my working life, I would tell you that I've worked at the Financial Times for a quarter of a century. If pressed further, I might reveal (depending on who was asking) that long ago I worked briefly for JPMorgan. I might also add that I went to Oxford university.

Friday, April 27, 2012

WASHINGTON: Forget US monetary policy. For the blogosphere, the most entertaining part of the Federal Reserve's meeting this week was the clash between its chairman Ben Bernanke and Nobel prize-winning economist Paul Krugman.

Thursday, April 26, 2012

THE strong buyer demand this month for Sky Habitat, Singapore's most expensive suburban condominium, has created a flutter in the blogosphere. A three-bedroom, 99-year leasehold condo in Bishan for $2 million? Isn't that over the top, even if it claims an 'iconic' design?

HEALTH insurance is vital for protection against medical bankruptcy. Illness and the often substantial costs associated are unpredictable. Insurance pools monies and enables the many fortunate to support the unfortunate few.

26 April is a very sad day in Belarusian history. On 26 April 1986 a disastrous accident took place at a nuclear power plant in Chernobyl, just across the border in Ukraine. It became one of the most horrible man-made disasters ever. Belarus suffered from the radioactive fallout more than any other country.

Wednesday, April 25, 2012

RECENTLY my research team observed nearly 300 middle school, high school and university students studying something important for a mere 15 minutes in their natural environments. We were interested in whether they could maintain focus and, if not, what might be distracting them. Every minute we noted exactly what they were doing, whether they were studying, if they were texting or listening to music or watching television in the background, and if they had a computer screen in front of them and what websites were being visited.

Saturday, April 21, 2012

NEW YORK: In the latest rebuke of eye-popping pay packages on Wall Street, a major institutional investor is taking the rare step of opposing the re-election of a Goldman Sachs board member who approves compensation for many of the bank's top executives.

'People should stop buying cars now, then COEs will start to fall,' said the boss of a continental dealership who did not want to be named. 'I sell cars for a living. I should not be saying this, but please, advise people to hold back.'

NEW YORK: In a stinging rebuke, Citigroup shareholders rebuffed the bank's US$15 million (S$19 million) pay package for its chief executive, Mr Vikram Pandit, marking the first time that big stock owners have united in opposition to outsized compensation on Wall Street.

Monday, April 16, 2012

COE prices are soaring because the economy is doing well and not because the Government is further slowing the growth in the vehicle population to 0.5 per cent, as that kicks in only in August, Transport Minister Lui Tuck Yew said on Sunday.

Saturday, April 14, 2012

Tuesday, April 10, 2012

TAIPEI: A longstanding debate on Taiwan's immigration policies has resurfaced following a speech by Singapore's Deputy Prime Minister Tharman Shanmugaratnam in which he cited Taiwan as a cautionary tale to highlight the importance of attracting foreign talent.

Saturday, April 07, 2012

ON MARCH 31, millions across the globe once again pledged their support to cut carbon by switching their lights off for Earth Hour. The hour was marked by candle-light vigils, fashion shows, concerts and other activities which made the atmosphere festive and party-like.